Spam is a problem that is costing ISPs hundreds of thousands of dollars a year to battle. Unsurprisingly they have adopted many approaches to combating this problem. For marketers, the tool of greatest interest - or concern, as the case may be - are the various criteria ISPs use to judge whether an e-mail is sent from a legitimate source.

ISPs have traditionally rated or judged an e-mail marketer's 'reputation' at the IP level - that is, the IP address from where the email originated. That began to change in 2009, when ISPs started to explore the concept of basing deliverability on domain reputation - associating reputation with an actual domain, such as MarketingVox.com. In other words, reputation of the sender is independent of the system or location from where the emails have been sent. Authenticating the domain can be accomplished through a few different email authentication standards, such as Sender Policy Framework, or SPF - an email authentication standard that is path-based and validates the sending entity.

Another is Domain Keys Identified Mail (DKIM), which is encryption based and validates the content of a message hasn't been tampered with while in transit and can be tied back to a sending domain. Other email authentication approaches include SenderID and Domain Keys.

These are still early days, though, for both domain reputation systems in general and specifically, the standards the ISPs are using - a state of affairs that does not make life easy for marketers. Also, ISPs - which are not very forthcoming about the details of their systems for security reasons - are likely to keep using IP-based methodologies as well, so senders will still need to closely monitor their IP reputations as ISPs.

Best Practices That Serve Both Methodologies

The good news, for marketers, is that much of the best practices for IP-based reputation management are similar to domain-based ones. These include sending email that is wanted, expected and above all, relevant to your subscribers. Other tips include:

Watching what Google does and planning accordingly. Google has already implemented an authenticated domain reputation system using both DKIM and SPF (sender policy framework) together, according to ReturnPath.  Some of the metrics that Gmail looks at - and ones that Yahoo, AOL, and anyone else creating a domain reputation system are also likely to employ - are:

• How many times mail from this domain went into the spam folder automatically, due to IP reputation or content filters.

• How many times mail from this domain went into the inbox automatically.

• How many times a user marked a message from this domain as spam.

• How many times a user marked a message from this domain as "not spam."

Focusing on authentication and certification. Domain reputation will be based on authentication, ReturnPath also says. "Specifically at AOL, Yahoo!, and some of our other ISP partners (who haven't announced their systems yet) it will be based on DKIM."

The Standards

Standards-setting in any industry is often a tug-of-war between competing players and industry representatives. Domain-based reputation is no different. For the moment, DKIM appears to be the favored approach, followed by SPF to a lesser extent. SenderID or Domain Keys, by contrast, are increasingly being viewed as obsolete.

In an interview posted on the Deliverability blog in September 2009 Franck Martin from Genius.com gives his opinion on why SPF is the preferred approach by some ISPs.

"First for a sender, SPF is very easy to implement because all you need is to add one record to your DNS, and SPF provides a unique functionality in that if you want to know all the servers that a particular domain is sending from, you can use SPF to acquire a list of IP addresses. This is helpful when you try to figure out if you are blocking any IPs when a customer complains he is not receiving emails from the email address of his mother. This shows there is a need for this type of information."

DKIM, though, scored a major backer in 2010 when Microsoft announced it was overhauling its Hotmail email service: one of the enhancements was support for DKIM. Up until that point Microsoft had been the primary backer of SenderID. "A lot of people felt like Microsoft was biased, only doing SenderID because that's the one we had pushed early on," John Scarrow, general manager of safety services at Microsoft explained, via eWeek.  "We think it's the right thing to do for the industry. We think it will encourage more people to sign their mail with DKIM."

Other ISPs have confirmed they are making significant investment in DKIM - in some cases, such as Yahoo, email is not eligible to be added to the feedback loop without it, according to Eloqua.

One reason ISPs like DKIM is because it uses public-key cryptography to authenticate the domain name that signed the message, making "DKIM more useful than other types of authentication, where the best that can be done is to relate an email message to the IP address that sent it," Return Path says.

Senders like it, according to ReturnPath, because:

• They can change IP addresses, add IP addresses or move to a new Email Service Provider (ESP), while still preserving their domain-based reputation.

• If a sender has had to change ESPs and is working to rebuild their IP reputation, domain-based reputation appears to reduce that build-up period.

• Senders now sending from shared IP addresses will be less likely to "catch" a negative reputation from those with whom they share an address.

Who's Using Domain-based Reputation Systems?

According to a report [pdf] by Pivotal Veracity, several ISPs, including AOL, Yahoo, Windows Live, Comcast, Verizon, Road Runner, Bell Canada and CloudMark are augmenting IP-based reputation systems with portable domain-based reputation systems for those mailers using DomainKeys/DKIM authentication.

While ISPs don't tend to reveal their entire approach, the information they provided to Pivotal was surprisingly detailed. Marketers should use these points as they craft their own approaches.

• A reputation model is heavily based on user complaints - the more complaints that are generated the more likely your mail will land in the spam folder.

• Content, on the other hand, is often not factored into an IP's reputation. The reason for that is because content changes so often it becomes an unreliable metric.

• Some ISPs monitor the number of unknown users mailers are generating per hour. They then filter IPs that have high levels of hard bounces.

• Many ISPs monitor spam folders for mistake in filtering - but many do not. Messages that are marked as "not spam" by customers do not necessarily improve a mailer's reputation.

• Also important to ISPs as they track reputation are bad addresses and honey pots (deactivated addresses converted by the ISP into spam traps.).

Final Thoughts: Segmenting an Email List by Engagement

At the heart of domain-based reputation management is how engaged a recipient is, or has been, with the sender - a metric that email marketers are taking to heart for a number of reasons. Simply put, "the vast majority of your sales will come from the engaged customers and the more engaged customers you have, the more sales you will make," according to Matthew Kelleher at eConsultancy.  "Engaged email recipients have a higher propensity to purchase." That is why email marketers are beginning to segment their lists not just according to traditional categories but also based on their engagement.

According to Kelleher there are three general categories of engagement:

1) Engaged subscribers. This group opens and clicks emails and have done so recently; they have recently visited the website; they are a previous purchaser. "These people will want your emails, respond to your offers, and if you want a segment to tactically email, this is the one to focus on. This is the conversion segment."

2) Semi Engaged. They open your emails sometimes - although not too recently. They have also not visited the website recently, and are not approaching any anniversary purchase. Reduce the frequency for this customer and base the communications on value and relationship rather than immediate offers, Keller advises. The content for emails to this group will need more consideration, and the reduction in frequency will provide greater brand impact when the next email arrives. "It maybe impractical to implement a dedicated relationship program, but just reducing frequency to this group will keep more of them reading your emails." Semi-engaged recipients are the 'relationship' segment and once they are ready to do something, they will fall into the first segment, and become the focus of a conversion program.

3) Disengaged. These people haven’t opened or clicked an email for quite some time, perhaps years. They are trouble - probably more than their presence on your list is worth - as they can damage your sending reputation and deliverability. "Although you will probably get sales from this segment, the damage you will do to the rest of your program will make it counter productive." Making the Jump The question is how to push semi-engaged recipients into the engaged category? Tailoring content, spacing emails and making time-sensitive offers are effective strategies to beef up conversions.

Another under utilized option is to create new email streams such as "Clearance," "Consumer Reviews" and "Daily Deals," according to Loren McDonald at Silverpop.  "You can potentially increase frequency while enabling subscribers to opt in and out of each email stream separately." That also gives you a chance to tinker with the opt-in process to capture ore data that enables better targeting, he adds. Also, a "two- or three-part welcome new customer series might more effectively engage subscribers, leading to higher retention and average order value."